The Tacoma charity featured in a recent KING 5 story is under scrutiny from two government agencies over its treatment of veterans in need of housing assistance.
Both the Washington State Attorney General's office and the U.S. Department of Veterans Affairs are looking into complaints about the Making a Difference Foundation, which advertises homes in the Puget Sound region and in Texas for homeless veterans.
Last March, KING 5 featured two families who responded to online ads posted by the foundation promising affordable housing, a path to home ownership and financial counseling. The families said they felt bait-and-switched: The property they moved into was in poor condition, they didn't receive credit counseling services, and they ultimately found themselves in a confrontational relationship with the foundation's president and founder, Ahndrea Blue.
Kathie King said she moved from New Mexico to Oak Harbor but only lasted 23 days in the rental home provided by The Making a Difference Foundation. King said the house was filthy and infested with rats, and had mold and exposed wiring. King said the move cost her thousands of dollars. She filed a complaint with the Washington Attorney General’s Office.
Varronica Hendricksen of Oak Harbor said she and her husband entered the Homes for Veterans Program run by the Making a Difference Foundation expecting financial help and credit counseling so that they could buy a home but were evicted for falling behind on rent, then sued in small claims court by Ahndrea Blue. The Hendricksens also filed a complaint with the WA Attorney General’s Office.
In an interview in March, Ahndrea Blue denied she had mistreated King or that the house was in poor condition. “Apparently the house had been broken into (before King moved in) but the house was not in shambles, it was livable,” Blue said.
As for the Hendricksens, Blue said she gave them every opportunity to succeed in her program but they did not take advantage of referrals she provided for things like credit counseling and budgeting. “We’re not going to make you do anything,” Blue said, “all we can tell you is what you should be doing. We can offer you ‘x’ and ‘y’, if you choose not to follow through, there’s nothing we can do.”
Blue said she gave the Hendricksens “multiple chances…eviction is always the last option.”
Washington Attorney General Bob Ferguson said he was personally touched by the veterans’ accounts in the KING 5 News report. “The reaction I expect anyone had who watched that, extreme disappointment with the allegations raised by the individuals that you profiled in that story. That’s something that I watched, others in my office watched as well,” he said.
Ferguson said he has appointed a staff attorney to handle all complaints regarding veterans and he’s been personally briefed on four complaints against the Making a Difference Foundation.
"We take them [the complaints] very seriously. I can assure you that's happening. I've had several conversations with my team about these complaints. That's why I want to have this conversation, because we do take it seriously," Ferguson said.
Two more families come forward
Since KING 5's story aired in March, more veterans have come forward to describe their experiences in the foundation's Homes for Veterans program.
Gary and Wendy Flowers, both U.S. Navy veterans, answered a foundation ad promising an affordable rental home in Snohomish County.
"It said, 'Are you a homeless vet? We have a program for homeless vets, go to this website, the rent is based on your income,'" Wendy Flowers said of the ad. "My fingers were crossed and I'm thinking, 'please' ... because I didn't know what the parameters were of who qualifies for this program and who doesn't, really hopeful."
The Flowers said that after contacting Ahndrea Blue, they were offered a rental home in Tulalip -- one Blue told them they could ultimately buy.
"The thing was, she said in 2 years, we'll work with you to try to buy the house you're living in," said Gary Flowers. "We were really looking forward to that, we liked the place; we liked the neighborhood."
When they moved in, the Flowers said there was no refrigerator in the house. They bought one themselves, but said Blue refused to reimburse them for it as promised.
Gary, a construction worker, said Blue asked him to work on one of her other houses, which he agreed to do.
"I went there got the materials, called her about it, and then she either didn't understand what I was saying or got really confused about the whole situation because she really got angry with me and then wanted to talk to my wife and said she didn't want me to do the work anymore," he said.
When Blue changed her mind, Gary said he decided not to do the work.
Wendy Flowers said the relationship declined. "It just started getting more and more bizarre, and more and more hostile and then where you start thinking I think we need to back off here," she said.
Wendy said Blue sent an email accusing her of being crazy and suffering from Post-Traumatic Stress Disorder.
On December 30, the Flowers said Blue contacted them and insisted that they come to Seattle on January 2nd or 3rd for an in-person meeting. The Flowers said they told Blue that they lacked the gas money for the trip from Tulalip and that Gary had to work. The next day -- New Year's Eve -- Blue told the Flowers that they were being removed from the Homes for Veterans program for failing to cooperate.
Wendy said she was deeply upset. "I told her, you're kicking out a veteran family with three children because we can't attend a meeting, but you're saying you're helping veterans? I don't think so," Wendy said.
The eviction notice came on January 16. The Flowers also learned that Blue was suing them in small claims court for $5,000.
"The small claims really surprised us...the reason for the small claims...to me it just really came across as vindictive because she had checked breach of contract," Wendy said.
The Flowers wanted to take the refrigerator they bought for the home, but Blue refused. "She threatened to say we stole the refrigerator from her property and send me to jail, so we just left the refrigerator there because she's a lawyer and we didn't know how far she could take it," Gary said.
They moved out on February 1, 2013, but ultimately paid Blue's foundation $3,200 for January and February rent, plus attorney fees. The Flowers said the eviction and penalties they paid to Blue are keeping them from renting a new home.
Blue took another veteran and his family to court. Joseph and Alicia Hageman moved into a Tacoma home owned by the foundation in September 2012. They said Blue told them that the rent would be based on their income and that they would eventually be able to buy the home.
"Our rent basically would go toward improving our credit, she would report it to the bureau so after 3 years, we would be at a place where we could purchase the home through her," said Alicia Hageman of what Blue told them.
The Hagemans said they paid $1,100 for the first month's rent. Within days, they said Blue demanded an additional $500. The Hageman’s said they were shocked, but they scrambled to find the money.
"I was still believing this was a homebuyers program, so I'm like I can't let this slip out of our hands, I need to come up with the money, I started putting my furniture, purses and shoes onto Craig's List to make money for her," Alicia said.
They said they were surprised when Blue demanded they pay a sewer bill of $170, which they declined to pay, because they had seen paperwork in the home indicating it had a septic tank.
During their tenancy, they said Blue's behavior would change dramatically.
"She was understanding, she was talking normal, then before you knew it she was screaming, yelling, almost as if she was taunting me," Alicia said.
Two months after they moved in, Joseph found out that a check from the VA would arrive late. He said he notified Blue that he would be paying rent late, and the VA contacted Blue to confirm the money was on the way.
"My VA counselor had also indicated to her that my payment would be there November 7. And I think it was November 5th that she gave us the official you're out of the program. Two days prior to my money getting there she kicked us out of the program," Joseph said.
The Hagemans said they were evicted shortly before Christmas after living in the home just three months.
Blue took the Hagemans to court and won a judgment for $2,248 for unpaid rent, late fees and attorneys fees. They said Blue also filed a case against them in small claims court for $5,000 but did not show up for the hearing.
The Hagemans complained to Attorney General Ferguson's office and said they were speaking with KING 5 to warn other veterans.
"I don't want any other families to go through this. Never," Alicia said. "The worst situation I ever had to go through is dealing with this program. She just made it a nightmare," Joseph said.
Status of foundation
Ferguson would not discuss details of the ongoing investigation, but the complaints would fall into the category of whether Blue's foundation engaged in unfair or deceptive business practices.
The Department of Veterans Affairs, meanwhile, has suspended the Making a Difference Foundation from a program that sells VA-owned homes to charities seeking to help homeless veterans. The VA said it hopes to complete its review of the foundation's work within several weeks.
According to the VA, Blue's foundation has purchased 34 homes through a program that sells homes to nonprofits at a discount. The homes are typically ones that were bought with VA-backed loans and later foreclosed on. Nonprofits that promise to house veterans in the homes for at least three years are eligible to buy the properties at anywhere from a 20 to 50 percent discount.
The VA said it conducts annual inspections of the homes in its program and attempts to speak to the veteran but does not enter the homes unless the veteran is present and is not able to speak with everyone in the program. The VA said it does ask the participating charity for information on the number of veterans served.
Of the 34 homes bought by Blue's foundation, 29 are in Washington state:
8 in Pierce
6 in Thurston
2 in King
2 in Snohomish
4 in Skagit
3 in Island
4 in Kitsap
Records obtained from the Washington state Department of Revenue show that nearly all these properties are exempted from local taxes under a charitable exclusion.
Five properties are in Texas -- two in Dallas, and three near Ft. Hood, a large Army base.
Blue declined to talk with KING 5. Her attorney issued the following statement:
“The Homes for Veterans Pilot Program (HVP) is operated through the Making A Difference Foundation, a not-for-profit organization. The program goal is to provide safe, secure and stable housing to homeless veterans and their families. In order to break the cycle of homelessness and empower veterans with the skills they need to succeed, HVP also offers assistance in securing services such as budgeting, food assistance, legal assistance and home ownership classes. Two years after its launch, this pilot program has served the needs of more than 149 people living in 30 homes located in Washington and Texas
“We are deeply committed to HVP veterans and their families and are gratified to be able to help then secure a new start in life. We are currently responding to the Attorney General’s Office and the U.S. Department of Veteran Affairs and look forward to resolving any of their concerns.”